Justia Insurance Law Opinion Summaries

A pedestrian was fatally struck by a vehicle on a public roadway in Riverside, California. The decedent’s family sued the City of Riverside and others for wrongful death and dangerous condition of public property. In response, the City filed a cross-complaint against various contractors and their insurers, including Design Services, Inc. (DSI) and RLI Insurance Company (RLI). The City alleged that DSI had contracted to perform street lighting evaluations and upgrades, and that the contract required DSI to obtain insurance from RLI naming the City as an additional insured. The City contended RLI refused to defend and indemnify the City against the wrongful death lawsuit, despite its obligations under the policy.The Superior Court of Riverside County sustained RLI’s demurrer without leave to amend, finding that under Royal Globe Ins. Co. v. Superior Court, a plaintiff may not sue both the insurer and the insured in the same action. The court held that joining RLI in the same lawsuit as its insured, DSI, would risk prejudice by alerting the jury to the existence of insurance, in violation of California Evidence Code section 1155. The court dismissed the City’s cross-complaint as to RLI but allowed the City to pursue its claims in a separate action.The California Court of Appeal, Fourth Appellate District, Division One, reversed the judgment of dismissal. The appellate court held that the prohibition on joining an insurer and its insured in the same action does not apply when the City, as an additional insured, asserts its own contractual rights against RLI. The court found the City’s contractual privity with RLI distinguishable from the situation in Royal Globe and noted that any risk of prejudice could be addressed through severance or bifurcation. The case was remanded for further proceedings on the City’s claims against RLI. View "City of Riverside v. RLI Insurance Co." on Justia Law

A certified nursing assistant employed by a home health provider sustained injuries to her right shoulder and lower back during the course of her employment. She received medical treatment from several providers and was paid mileage reimbursements for traveling between patient homes. Following her injuries, the employer’s insurance carrier denied further payment of temporary disability and medical benefits, including an outstanding medical bill, and ultimately terminated her employment. The worker secured new employment at a higher wage and subsequently filed for workers’ compensation benefits, claiming entitlement to disability benefits and payment of the disputed medical bill. The employer denied liability.The Administrative Law Judge found that the worker had a compensable lower back injury with a 12% impairment rating, entitling her to temporary total and permanent partial disability benefits, but excluded mileage reimbursements from her average weekly wage and denied payment for the outstanding medical bill based on the provider’s failure to submit it within the statutory 45-day deadline. The Workers’ Compensation Board affirmed the ALJ’s findings. The Kentucky Court of Appeals affirmed the exclusion of mileage reimbursements and dismissed the issue of the unpaid medical bill as moot after the employer voluntarily paid it during the appeal. The Court of Appeals also rejected a motion for leave to file an amicus brief, deeming it unauthorized.The Supreme Court of Kentucky affirmed the exclusion of mileage reimbursements from the wage calculation, holding such payments were reimbursements for actual expenses and not “wages.” The Court reversed the dismissal of the medical bill claim as moot, applying the “voluntary cessation” exception, and held that denial of compensability constitutes reasonable grounds to excuse noncompliance with the 45-day rule for submitting medical bills. The Court also found the Court of Appeals erred in rejecting the amicus motion. The decision was affirmed in part and reversed in part. View "HARRIS V. MERCY HOME HEALTH" on Justia Law

Several insurance companies participate in Indiana’s Assigned Risk Plan, a statutory system designed to ensure workers’ compensation coverage for employers unable to obtain insurance in the voluntary market. One participating insurer, Technology Insurance Company, provided coverage under this system. After handling a significant workers’ compensation claim and settling for over $2 million, the company sought reimbursement from the Indiana Compensation Rating Bureau, as provided in their agreements. The Bureau denied reimbursement, alleging the company had acted fraudulently. The company followed the dispute-resolution procedures required by contract, ultimately securing a favorable ruling from an administrative law judge, who ordered full reimbursement. The company then sought additional relief—attorneys’ fees, interest, and expenses—from the agency, but received no response despite repeated requests.After payment of the principal settlement amount but no fees or interest, the company sought judicial review in the Marion Superior Court, which found the Department of Insurance’s failure to rule was arbitrary and contrary to law. The trial court ordered the Bureau to pay fees, interest, and expenses. The Bureau appealed, and the Indiana Court of Appeals reversed, holding the company’s claims for fees were not governed by the parties’ agreements and must be presented anew to the Bureau.The Indiana Supreme Court granted transfer, vacating the appellate court’s decision. The Court held that the company was required to exhaust administrative remedies, as set out in the Assigned Risk Plan and related agreements, but found the company had done so by pursuing its claims through the prescribed channels. The Court further held that the company was entitled to prejudgment interest, attorneys’ fees, and expenses under the contracts, and that these collateral claims could properly be added in the judicial review proceedings without further agency exhaustion. The judgment for the company was affirmed and the case remanded to the trial court for calculation and award of appropriate fees, interest, and expenses. View "Indiana Compensation Rating Bureau v. Technology Insurance Company" on Justia Law

Toy Quest Ltd. purchased an insurance policy from General Star Indemnity Company, which covered personal injury claims arising from certain specified torts, including malicious prosecution. When ASI, Inc. sued Toy Quest in federal district court in Minnesota for abuse of process, General Star agreed to defend Toy Quest under a reservation of rights but then filed a separate lawsuit seeking a declaratory judgment that it had no duty to defend against ASI’s claim. Toy Quest and ASI contended that the policy covered abuse of process, that California rather than Minnesota law should apply, and that the court should abstain from deciding the case until the underlying litigation was resolved.The United States District Court for the District of Minnesota granted General Star’s motion for judgment on the pleadings, holding that the policy did not cover abuse of process claims and that Minnesota law applied. The court also declined to abstain from hearing the declaratory judgment action and denied Toy Quest’s motions to certify the coverage issue to the Minnesota Supreme Court and to disqualify ASI’s counsel. Toy Quest and ASI appealed these rulings.The United States Court of Appeals for the Eighth Circuit affirmed the district court’s judgment. The court held that the district court did not abuse its discretion in declining to abstain, as the cases were not parallel and the federal court had jurisdiction. It further held that the insurance policy’s express coverage for malicious prosecution did not extend to abuse of process claims, as these are distinct torts under Minnesota law, and similar reasoning would apply under California law. The court also held that there was no actual conflict of law and denied the motions to certify and to disqualify counsel. View "General Star Indemnity Company v. ASI, Inc." on Justia Law

An individual purchased a long-term care insurance policy that covered expenses incurred at nursing or assisted living facilities. During the COVID-19 pandemic, at age 94, the insured fractured her hip and, due to concerns about contracting COVID-19 in a communal setting, received post-surgical care at home as prescribed by her physician. When she submitted a claim for these home health care expenses, the insurance company denied coverage, stating that her policy did not include home care benefits. The insured had selected a policy that covered only institutional care, though an alternative plan of care provision allowed for non-institutional benefits if certain conditions were met, including mutual agreement between the insured, her provider, and the insurer.The insured, through her successor trustees, filed a breach of contract action in the United States District Court for the Northern District of Illinois, Eastern Division. Both parties moved for summary judgment. The district court found in favor of the insurer, holding that the policy did not provide home health care benefits, and that the denial of coverage under the alternative plan of care provision was not in bad faith because the insured had not met the necessary conditions to trigger that provision.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the grant of summary judgment de novo. The court held that the policy did not provide for home health care benefits, as required for the relevant Illinois insurance regulation to apply. The court also determined that the alternative plan of care provision was discretionary and did not guarantee coverage for home care. Additionally, the insurer did not breach the implied covenant of good faith and fair dealing by enforcing the explicit terms of the policy. The Seventh Circuit affirmed the district court’s judgment. View "Hartnett v Jackson National Life Insurance Company" on Justia Law

A group of workers was injured in a workplace accident at a South Texas refinery when a fire-suppression system, supplied and programmed by Scallon Controls, Inc., unexpectedly discharged after losing power. The workers sued S&B Engineers & Constructors, Ltd. and Sunoco Logistics Partners, the companies responsible for the project. S&B and Sunoco then brought third-party claims against Scallon, alleging breach of contract and seeking indemnification under their agreement, which included a proportional indemnity provision. Following four years of litigation, S&B and Sunoco settled with the injured workers, fully resolving the tort claims. S&B and its insurer, Zurich American Insurance Company, subsequently sought to recover from Scallon a proportional share of the settlement, corresponding to Scallon’s alleged share of fault.The trial court granted summary judgment for Scallon, and the Court of Appeals for the Ninth District of Texas affirmed, relying on prior Supreme Court of Texas decisions, notably Beech Aircraft Corp. v. Jinkins and Ethyl Corp. v. Daniel Construction Co. The appellate court held that S&B and Zurich could not maintain an indemnity claim after settling, and that Zurich’s claim was time-barred.The Supreme Court of Texas reversed, holding that neither Jinkins nor Ethyl precludes enforcement of a freely negotiated, proportional indemnification agreement after settlement. The Court clarified that such contracts are distinct from common law or statutory contribution rights and that parties may contract for comparative indemnity, so long as the contract does not require indemnification for the indemnitee’s own negligence unless stated with specific language. The Court also held that Zurich’s claim was timely, as the limitations period began to run at settlement. The case was remanded to the trial court to determine whether S&B and Zurich can establish Scallon’s proportional liability and the reasonableness of the settlement. View "S&B ENGINEERS & CONSTRUCTORS, LTD. v. SCALLON CONTROLS, INC." on Justia Law

The case concerns an individual who was injured in an automobile accident while driving a car borrowed from a friend without seeking or obtaining permission. The driver did not have a valid license or insurance at the time. After the accident, she applied for personal protection insurance (PIP) benefits through the Michigan Assigned Claims Plan, and her claim was assigned to an insurer, which denied coverage. The insurer argued that her claim was barred under MCL 500.3113(a) because the vehicle was allegedly taken unlawfully and she did not have a reasonable belief that she had permission to use it.The Wayne Circuit Court denied the insurer’s motion for summary disposition and denied reconsideration. On appeal, the Michigan Court of Appeals reversed, concluding that the driver was not entitled to PIP benefits because her lack of a valid driver’s license meant she was unlawfully operating the vehicle at the time of the accident. The appellate court found that, since operating without a license is a criminal offense, this constituted an unlawful taking under the relevant statute.The Supreme Court of Michigan reviewed the decision and held that the appellate court misinterpreted MCL 500.3113(a). The Supreme Court clarified that the statute bars PIP benefits only if the vehicle was “taken unlawfully,” which is distinct from being “operated unlawfully.” The focus should be on how possession of the vehicle was gained, not on unlawful operation, such as driving without a license. The Supreme Court reversed the appellate court’s ruling and remanded the case for further proceedings to consider whether the driver’s actions constituted an unlawful taking of the vehicle, as opposed to unlawful operation. View "Swoope v. Citizens Insurance Co Of The Midwest" on Justia Law

Hurricane Ida struck Louisiana on August 29, 2021, causing damage to property insured by Capitol Preferred Insurance Company, which had merged with Southern Fidelity Insurance Company (SFIC). The named insured was Emma Bryan, and the plaintiffs—Cynthia Bryan, Aubry Bryan, Jr., Aunya Bryan, and Glenda Bryan—sought policy proceeds. The insurance policy required that any action be brought within two years of the date of loss. SFIC made an unconditional payment to the plaintiffs on March 1, 2022. On June 15, 2022, SFIC was placed into receivership and declared insolvent. Plaintiffs initially sued Louisiana Citizens Property Insurance Corporation (LCPIC) but amended their petition on October 24, 2023, to substitute the Louisiana Insurance Guaranty Association (LIGA) as the defendant.The trial court denied LIGA’s peremptory exception of prescription. LIGA then sought supervisory review from the Louisiana Court of Appeal, Fourth Circuit. The appellate court held, in a four-to-one decision, that the two-year limitation for suit against LIGA began on the date of SFIC’s insolvency, not the date of loss, and denied LIGA relief. One judge dissented, maintaining that prescription should run from the date of loss.The Supreme Court of Louisiana reviewed the matter. It held that LIGA is entitled to the benefit of the policy’s two-year prescriptive period, but this period is subject to interruption by an unconditional payment. The Court found that SFIC’s unconditional payment on March 1, 2022, interrupted prescription, and the plaintiffs’ amended petition was timely. The Court clarified that only unconditional payments—those made without qualifications or reservation of rights—interrupt prescription. The Supreme Court of Louisiana affirmed the denial of LIGA’s exception of prescription and remanded the case for further proceedings in the trial court. View "BRYAN VS. LOUISIANA CITIZENS PROPERTY INSURANCE CORPORATION" on Justia Law

A family visiting Arkansas stopped at the Lydalisk Bridge, a low-water crossing over the Middle Fork of the Little Red River. The bridge, owned by The Nature Conservancy, created a pool upstream where water flowed through narrow culverts beneath the bridge. There were no warning signs posted. A seven-year-old child swam in the pool and was pulled by the river’s current into a culvert, becoming trapped and subsequently dying. The Nature Conservancy had commissioned engineering reports about this and a similar nearby bridge, but received the report warning of risks at the Lydalisk Bridge only after the incident.The United States District Court for the Eastern District of Arkansas reviewed the parents’ negligence and malicious failure-to-warn claims against The Nature Conservancy and its insurers. The district court granted the defendants’ motions to dismiss. The court found that the Arkansas Recreational Use Statute (ARUS) generally relieves landowners from a duty of care to recreational users, unless there is a malicious failure to warn of an ultra-hazardous condition actually known to the owner. The court held that the complaint’s allegations did not plausibly show malice, only recklessness. The court also found that the Arkansas Direct-Action Statute (DAS) did not allow direct suit against the insurers, because The Nature Conservancy was not immune from suit—only from liability.On appeal, the United States Court of Appeals for the Eighth Circuit affirmed. The Eighth Circuit held that, under ARUS, Allen’s allegations did not satisfy the requirement for malicious conduct, and thus he failed to state a claim for breach of duty. The court further held that ARUS provides immunity from liability but not from suit, making DAS inapplicable to the insurers. The dismissal by the district court was affirmed. View "Allen v. Nature Conservancy" on Justia Law

A resident of Puerto Rico suffered work-related injuries in 1994, resulting in permanent total disability. His employer and its insurance carrier were ordered to provide medical care under Section 7 of the Longshore and Harbor Workers’ Compensation Act, as extended by the Defense Base Act. In 2019, a Puerto Rico-licensed physician recommended medical cannabis-infused edibles to treat the petitioner’s chronic pain. The petitioner sought reimbursement for these products from the employer’s insurance carrier, which denied the request.The petitioner then asked the United States Department of Labor’s Office of Administrative Law Judges to order reimbursement, arguing that medical cannabis was a reasonable and necessary treatment. The Administrative Law Judge denied the request, finding that marijuana’s classification as a Schedule I substance under the Controlled Substances Act (CSA) meant it could not have an accepted medical use under federal law. On appeal, the Department of Labor Benefits Review Board affirmed this decision by a 2-1 vote, agreeing that reimbursement was barred by the CSA and rejecting arguments that recent federal appropriations riders or executive actions altered the federal legal status of marijuana.On further appeal, the United States Court of Appeals for the Second Circuit reviewed the case. The court held that because marijuana remains a Schedule I substance under the CSA, it cannot be considered a reasonable and necessary medical expense for purposes of reimbursement under the Longshore and Harbor Workers’ Compensation Act. The court found that neither appropriations riders nor recent executive or legislative actions had changed marijuana’s federal classification or its legal status under the Act. Therefore, the court denied the petition for review. View "Garcia v. Department of Labor" on Justia Law